Money and credit market

The money and credit markets Interest rate and price changes Securities Banks and mortgage-credit institutes Other financial intermediaries Insurance companies and pension funds

The money and credit markets Capital transfers from lenders to borrowers A capital market is a market where financial products are traded, such as shares, bonds and credit. The market makes it possible to transfer capital from persons with a savings surplus to persons with a savings shortage. This allows the individual to time his investments and consumption in relation to his earnings. A smooth payment mechanism The purpose of the money market is to ensure a smooth payment mechanism so that transactions can be completed against payment without any major costs or difficulty. Thus, the money market concerns the liquidity applied for transfer of payments in connection with financial transactions. There is no clear dividing line between the money market and the capital market. Interest rate and price changes Increased internationalization Since the early 1980s, the Danish financial markets have seen a distinct development towards deregulation, internationalization and increasing competition. Danish citizens can make foreign investments or raise loans abroad without major difficulty or costs. The free movement of capital has together with a fixed exchange rate policy led to equalization of the prices (interest rates) of the financial products between the countries. In 1980, the difference between the Danish and German long-term bond interest rate was 10.6 percentage points. This difference has diminished until the beginning of the 1990 s after which the two interest rates have developed in parallel. In 2016 the Danish long-term bond interest rate was 0.3 per cent and the German longterm bond interest rate 0.1 per cent. Figure 1 Interest rate on 10-year government bonds Per cent 22 20 18 16 14 12 10 Denmark 8 6 Germany 4 2 0 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 www.statbank.dk/mpk100

Long-term interest rate reached 21 per cent in 1982 The interest on a financial claim reflects the lender s compensation providing capital. A distinction is made between short-term and long-term interest rates, i.e. the interest rates on short-term and long-term claims. Usually, the banks three-month CIBOR interest rate is applied as an indicator of the short-term interest rate, while the interest rate on ten-year government bonds often is the indicator of the longterm interest rate. The short-term interest rate can be affected centrally. The central bank of Denmark (Danmarks Nationalbank) can adjust the volume and price of liquidity in relation to the banks. The interest that the banks receive from or pay to Danmarks Nationalbank influences the interest rates fixed by the banks vis-à-vis their customers. The long-term interest rate reflects market-driven factors, first of all inflation and risk expectations. The longer the term of the claim, the greater influence will these factors have on the fixing of the interest rate. The long-term interest rate will usually be higher than the short-term interest rate. In 1982, the short-term interest rate was as high as 21 per cent per annum, partly because of high inflation expectations. Shares are risky investments A share is a certificate of ownership of a company. The value of the share depends above all on the expected future earnings of the company. Since future earnings are connected with great uncertainty, investing in shares may lead to both large losses and large gains. In addition to specific expectations of the company in question, the share price also reflects more general expectations of the particular industry and the economy at large. Minor changes in market information may create substantial fluctuations in the market. The Danish stock market for listed companies is not as large as the bond market. It reflects the Danish corporate structure, which is characterised by many small and medium sized enterprises without the tradition found abroad of entering the stock market to finance their need for capital. In 2016, 140 companies were listed on the Stock Exchange. Figure 2 OMXC, index of all listed shares at market value 850 800 750 700 650 600 550 500 450 400 350 300 250 200 150 100 End of year, 1995=100 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 www.statbank.dk/mpk13

Various indices are used as indicators of the development in the stock market. The most commonly used are the all-share index OMXC shown above, which shows the market value of all listed shares, and OMXC20 CAP, which is a weighted market value index of the 20 largest and most traded shares. There has been a trend of increasing prices reflecting the trends in the international markets. However widespread decreases in the stock markets are observable in the Danish indices. The sharp drop in 2008 followed the financial crisis which started in October 2008 and the European Debt crisis has contributed to the latest widespread decrease in the markets. Since 2012 the stock markets worldwide has regained the losses from the latest crises. Securities Danish mortgage bonds are internationally unique Bonds are liquid, standardized debt instruments with low risk and a fixed repayment profile. Before the introduction of the euro, the Danish bond market was among the largest in Europe 1. The market is dominated by government bonds and mortgage bonds. Mortgage bonds are secured by real property and have long maturity (up to 30 years). The Danish mortgage bonds are unique to the Danish market in terms of their role in relation to home financing. In addition to the security in real property, the relatively high degree of security relates to the terms and conditions associated with the loan assessment by the mortgage credit institutes concerning lending limits, maturity and accumulation of reserve funds. At the end of 2016, about 23 per cent of the total bond volume was owned by foreign investors. In recent years, foreign investors have shown an increasing interest in mortgage bonds. Thus, 22 per cent of mortgage bonds were held by foreigners at the end of 2016 compared to about 5 per cent in 1996. Figure 3 Shares and bonds traded on the Copenhagen Stock Exchange DKK billion 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 Bonds in circulation, nominal value Listed shares, market value 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 www.statbank.dk/dnvpdks 1 Following the introduction of the euro on 1 January 1999, the euro markets are no longer divided into regions, but constitute a single market.

Banks and mortgage-credit institutes The Central Bank purchased foreign currency to keep the krone rate stable The rate of the Danish krone depends on the supply and demand for foreign currencies. The demand for foreign currency increases at import payments and capital exports (e.g. when Danes purchase foreign securities or make investments abroad). Conversely, export payments and capital imports will increase the demand for Danish kroner. An increased demand for foreign currency will force the exchange rate upwards and the rate of Danish kroner will decrease. Danmarks Nationalbank trades in the foreign exchange market with a view to stabilize the krone rate through purchases and sales of foreign currency against Danish kroner. Thus, the primary purpose of foreign exchange reserves is to enable Danmarks Nationalbank to use intervention as a tool to maintain a stable exchange rate between the krone and the euro. Purchases of Danish kroner thus tend to strengthen the krone rate, while sales of Danish kroner, i.e. purchases of foreign currency, tend to weaken the krone rate. The volume of the Danish foreign exchange reserves has increased substantially since the early 1990s to 2003. This indicates that in the past decade Danmarks Nationalbank has made more purchases than sales of foreign currency in net terms to keep the krone rate down. In the period 2003 2008 the volume of the foreign exchange reserves decreased. Marked increase in foreign exchange reserves in recent years In the latest period the volume has increased, because of the difference in interest rates between Denmark and especially the Euro-area. As the interest rates have fallen in general, even small differences have made it attractive for foreign investors to invest in Danish securities. This has increased the demand for Danish kroner. The Central Bank has purchased foreign currency in order to stabilize the exchange rate. Figure 4 Foreign exchange reserve DKK billion 550 500 450 400 350 300 250 200 150 100 50 0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source data: Danmarks Nationalbank.

Denmark participating in ERM II Since 1 January 1999, Denmark has participated in an exchange-rate co-operation with the European Central Bank (ECB) for the EU member states, which do not participate in the European Monetary Union. In the agreement called ERM II (Exchange Rate Mechanism II) Denmark is accompanied by Lithuania. The purpose of ERM II is to retain the exchange rates within the agreed fluctuation band on +/- 15 per cent in relation to the central rate. Denmark has a narrower fluctuation band on +/- 2.25 per cent in relation to the central rate. In case of extraordinary pressure on the krone, in addition to selling some of its foreign exchange reserve Denmark may draw on an intervention credit/euro account with the ECB. Thus, the ERM contributes to stabilizing the krone rate in relation to the European currencies and the euro, but not in relation to other major currencies such as the US-dollar or the yen. Money as a means of payment Today, the function of money as a means of payment is based exclusively on trust. If a seller is to accept money as payment for his product, he must be able to trust that others will also accept money as the means of payment. In case of high inflation, the value of money as a means of payment will drop. Figure 5 Dankort (debit card) sales and notes and coins in circulation 400 DKK billion 350 300 Debit card sales 250 200 150 100 50 0 Notes and coins in circulation 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Table 321 and 323 Until 1931, the value of notes and coins could be converted into gold at Danmarks Nationalbank. Although the gold convertibility was subsequently abolished, the gold standard existed formally until 1971. This implied that Danmarks Nationalbank had a duty to maintain gold reserves corresponding to the value of notes and coins in circulation. Today, money is still claims against Danmarks Nationalbank, but these claims are no longer covered by the gold reserves of Danmarks Nationalbank. Difficult to estimate the money stock It is increasingly difficult to estimate the amount of liquidity available in the Danish society. Because of the use of Dankort (debit card), various types of accounts related to the Dankort have become just as liquid as notes and coins. At the same time, certain credit facilities may be connected to the Dankort, just as foreign banks may provide credit facilities to Danish citizens. Because of Denmark s position as a small, open economy with free capital movements, the role of the money stock as a monetary policy target figure is no longer as important as before.

Banking, mortgage lending and insurance activities still separate Since the early 1980s, the business areas in the financial sector have overlapped. Today, banks offer their customers pension schemes that are very similar to the schemes offered by life insurance companies. However, it is still prohibited to carry on banking, mortgage lending and insurance activities in one and the same company. New legislation made it possible to set up holding companies and intercompany ownership among the financial companies. This implies that a mortgage credit institute may own a bank and vice versa. As a result, the capital market has seen a number of mergers and group formations Few large and many small banks The banking sector handles functions in connection with payment and credit transfers, securities trading and related services. Despite the mergers among the major banks in recent years, a large number of small banks remain. At the end of 2015, 80 banks were registered, of which the two largest account for 70 per cent of the balance sheet total in the sector. The lending activity in the banking sector is often in focus because it is highly sensitive to market fluctuations and may be seen as an indicator of growth in for example consumption and investing activities. The interest margin, i.e. the difference between lending and deposit interest rates, also attracts attention. However, a significant proportion of the banks earnings derive from charges and fees. Figure 6 The banks earnings by type 2005 2015 Charges and fees Net receipts of interest Other receipts www.statbank.dk/mpk39 Lending activity of mortgage credit institutes depends on interest changes In Denmark, only mortgage credit institutes may carry on mortgage credit activities. Mortgage credit activities mean lending against registered security in real property based on the issue of mortgage bonds. Presently, there are seven players in the market. The lending activity is primarily influenced by the development in interest rates. Upward or downward fluctuations will trigger waves of remortgaging, where borrowers seek to convert their loans to obtain more favourable terms. Other financial intermediaries Consumer credit In addition to banks and mortgage credit institutes, credit is offered to Danish consumers by finance companies. There was a sharp increase in total consumer credit until the beginning of the global financial crisis in 2008. Over a 5-year period con-

sumer credit increased by 50 per cent from DKK 14 billion by the end of 2003 to DKK 21 billion by the end of 2008. The increase was primarily boosted by the Danes use of blank credit, which is an unsecured personal loan. The use of blank credit has been steadily falling since the global financial crisis. In the period from 2011 to 2013 the total consumer credit has increased again. This is mainly due to increased withdrawals from retailer credit cards and account cards, which cover all types of lending to which a secured or unsecured retailer credit card or account card is attached. A large part of the drop in 2014 and 2015 in the total consumer credit is due to changes in the number of companies in the sector for non-bank consumer credit companies. In 2016 the total consumer credit increased to DKK 19 billion. Figure 7 Consumer credit, end of year 22 20 18 16 14 12 10 8 6 4 2 0 Billion Total Blank credit Balance on credit card and accounts Secured credit 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 www.statbank.dk/mpk30 Vigorous expansion in investment associations An investment association is an association that invests the funds received as contributions from its members. The members are often small savers, but may also be life insurance companies, pension funds and foundations. The advantages of acting jointly are lower administrative costs and enhanced possibilities for risk diversification. The investment associations have expanded vigorously over the past few years. The balance sheet total has increased from DKK 290 billion at the end of 2002 to DKK 845 billion at the end of 2015. Insurance companies and pension funds Increasing share of personal savings with insurance companies and pension funds Distinction is made between non-life insurance and life and pension insurance. The different types of insurance may not be offered by the same company, but may be connected through inter-company ownership. Particularly the life and pension insurance business has increased in recent years. Due to the development of labour market pension schemes and various forms of tax privileges in connection with pension contributions, an ever-increasing share of personal savings are managed by the pension funds and life insurance companies, which have thereby become important players in the financial markets.

Table 304 Owners of quoted shares and unit trust certificates. 2016 Share prices. end of year Owners 1 Manufacturing. etc. Non-financial corporations Transport. postal services and telecommunications Other corporations Financial corporations Foreigns corporations Total DKK billion Total 858.2 112.5 1 005.7 1 686.5 58.6 3 721.6 Non-financial corporations 135.5 13.0 271.3 145.4 2.9 568.1 Financial corporations 37.4 12.8 84.8 285.9 33.7 454.6 Insurance and pension funds corporations 17.8 3.6 30.9 458.1 2.8 513.2 General government 56.6 0.0 19.2 27.7 0.6 104.1 Households 2 109.9 10.5 117.7 515.4 16.6 770.1 Non-profit institutions serving households 2.4 0.4 6.8 28.0 1.0 38.6 Sector unknown 0.0 0.0 0.1 0.1 0.0 0.2 Abroad 498.5 72.3 475.1 225.9 1.0 1 272.7 1 Owners are defined as account holders with the Danish Securities Centre. 2 Households consists of privately owned enterprises, employees, pensioners etc. Source: Danmarks Nationalbank www.statbank.dk/dnvpdks Table 305 Share index OMXC-index 2015 2016 End of the year end of 1995 =100 Total 786 723 Energy 74 70 Materials 227 392 Manufactoring 411 485 Discretionary 117 119 Consumer goods 201 176 Health Care 3 113 2 342 Finance 499 544 ICT 1 297 1 286 Telecommunication 111 117 Utilities 122 125 Source: Copenhagen Stock Exchange www.statbank.dk/mpk13

Table 306 Quoted bonds in circulation by holder sector. 2016 Nominal value at the end of the year Central government bonds, etc. Bonds issued by mortgage banks etc. 1 Other quoted bonds 2 Total Total 610 209 3 066 510 155 748 3 832 467 Non-financial corporations 3 898 97 356 10 705 111 959 Financial corporations 83 219 1 572 197 81 811 1 737 227 Monetary financial institutions 35 978 1 038 749 49 599 1 124 326 Other financial institutions 47 241 533 448 32 212 612 901 Insurance and pension funds corporations 266 440 610 053 18 040 894 533 General government 63 225 57 084 8 647 128 956 Central government 63 554 14 213 2 749 80 516 Local government -340 41 635 5 861 47 156 Social security funds 5 819 30 854 Households 1 087 33 817 9 254 44 158 Non-profit institutions serving households 483 16 640 870 17 993 Sector unknown 65 70 9 144 Abroad 191 792 679 293 26 412 897 497 1 Bonds issued by mortgage banks and bonds issued by other institutions that issue bonds. 2 Local government bonds, bonds issued by the Ship Credit Fund of Denmark, debentures, foreign bonds and CMO bonds. Source: Danmarks Nationalbank www.statbank.dk/dnvpdks Table 307 Financial sector, main figures 2014 2015 Balance Companies Employees Balance Companies Employees DKK bio. number DKK bio. number Total 12 411 328 62 174 12 017 318 60 600 Banks 4 049 84 37 851 3 614 80 37 193 Mortgage banks 3 718 7 4 380 3 647 7 4 160 The ship Credit fund of Denmark 69 1 62 65 1 67 Securities and broking companies 2 41 541 3 39 538 Investment trusts 770 49... 843 51... Investment funds (big) 1 0,6 4 128 0,6 4 134 Investment funds (small) 1 1.2 10 217 1,3 11 209 Non-life insurance companies 206 75 13 533 202 71 13 234 Life insurance companies 2 013 19 3 314 2 074 18 3 055 Non-occupational pension funds 646 16 210 672 15 215 Company pension funds 59 19 27 60 18 28 ATP, LD, AES and SP 877 3 1 911 835 3 1 767 1 Large - with licence to carry out secutities trading activities. Small - without licence to carry out securities trading activities. Source: Danish Financial Supervisory Authority www.statbank.dk/mpk55

Table 308 Profit and loss account and balance sheet of Danmarks Nationalbank Profit and loss account 2015 2016 Net interest receivable 1 877-51 Market value adjustment 2 128 3 724 Dividend on investments 263 957 Other income 5 4 Costs including depreciation -678-706 Net profit of the year 3 595 3 928 Balance sheet Assets, total 481 687 497 940 Stock of gold 15 490 17 491 Special drawing rights in the IMF 19 601 16 655 Foreign assets 405 502 424 894 Lending 3 502 3 530 Securities 33 689 33 110 Other assets 3 903 2 260 Liabilities, total 481 687 497 940 Notes in circulation 64 215 64 913 Coin in circulation 5 951 6 010 Allocations of Special Drawing Rights 14 507 14 512 Foreign liabilities 3 084 3 004 Deposits 160 930 217 481 Other liabilities 3 872 6 581 The Central Government 158 244 111 772 Equity capital 70 884 73 667 Source: Danmarks Nationalbank www.statbank.dk/mpk38

Table 309 Discount rate of Danmarks Nationalbank Discount rate Discount rate Discount rate 1995 17 March 3.50 7 June 4.00 8 March 6.00 28 April 3.75 2008 6 July 5.75 9 June 4.25 4 July 4.25 3 August 5.50 1 September 4.50 8 October 4.50 25 August 5.00 6 October 4.75 7 November 4.00 9 November 4.75 2001 5 December 3.50 15 December 4.25 14 May 4.50 2009 1996 31 August 4.25 16 January 2.75 25 January 4.00 18 September 3.75 6 March 2.00 7 March 3.75 9 November 3.25 3 April 1.75 19 April 3.25 2002 11 May 1.40 1997 6 December 2.75 8 June 1.20 10 October 3.50 2003 14 August 1.10 1998 7 Marts 2.50 28 August 1.00 6 May 4.00 6 June 2.00 2010 29 May 3.75 2005 15 January 0.75 21 September 4.25 2 December 2.25 2011 5 November 4.00 2006 7 April 1.00 4 December 3.50 3 March 2.50 8 July 1.25 1999 9 June 2.75 4 November 1.00 4 February 3.25 4 August 3.00 9 December 0.75 9 April 2.75 6 October 3.25 2012 5 November 3.00 8 December 3.50 1 June 0.25 2000 2007 6 July 0.00 4 February 3.25 9 March 3.75 per cent Source: Danmarks Nationalbank www.statbank.dk/dnrentm

Table 310 Profit and loss account and balance sheet of Danish banks End of year 2014 2015 Number of banks 84 80 Antal ansatte, ultimo året 37 851 37 193 Profit and loss account +Interest income 72 899 59 800 Interest expenses 25 577 15 327 Net income from interest, net 47 322 44 473 +Share dividends 2 914 1 454 +Charges and commissions income 29 302 31 714 Charges and commissions expenses 6 036 6 219 Net income from charges and commissions 73 502 71 422 +Revaluation of securities and foreign exchange -2 295 2 567 +Other ordinary income 7 958 3 092 Profit/loss on financial items 79 165 77 081 Staff and administrative expenses 46 942 46 119 Depreciation of tangible and intangible assets 13 093 7 220 Other operating expenses 1 209 1 112 Depreciations and provisions, net 12 468 5 608 +Adjustments of shares 10 773 11 333 Profit/loss on ordinary activities 16 227 28 355 +Extraordinary receipts, net 0 0 Profit/loss before tax 16 227 28 354 Tax 2 160 4 477 Profit/loss for the year 14 067 23 877 Balance sheets Assets, total 4 014 610 3 577 950 Claims on credit institutions, etc. 428 775 303 453 Loans 1 651 838 1 640 305 Bonds, etc. 1 039 317 823 273 Shares, etc. 26 579 41 850 Holdings in associated and affiliated enterprises 158 923 161 873 Intangible assets 15 371 11 662 Tangible assets 14 923 12 121 Other assets 678 882 583 413 Liabilities, total 4 014 610 3 577 950 Liabilities to credit institutions, etc. 648 097 475 846 Deposits 1 794 846 1 669 587 Issued bonds, etc. 336 877 378 441 Other liabilities, accruals and deferred income 850 517 662 065 Provisions for liabilities and charges 12 610 58 813 Capital deposits 67 004 12 122 Equity capital 304 659 319 969 Note: Excluding the banks in Greenland. Source: Danish Financial Supervisory Authority www.statbank.dk/mpk39

Table 311 Banks domestic lending and deposits. 2016 Deposits 1 Lending 1 mio. kr. Total 1 559 443 1 231 275 Agriculture, forestry and fishing 21 796 68 903 Mining and quarrying 2 719 828 Manufacturing 33 091 53 453 Electricity, gas, steam and air conditioning supply 8 505 14 832 Water supply, sewerage and waste management 4 573 2 532 Construction 24 571 22 388 Wholesale and retail trade 37 813 63 172 Transportation and storage 15 236 17 475 Accommodation and food service activities 4 829 7 091 Information and communication 19 596 7 098 Financial and insurance activities 350 061 335 372 Real estate activities 71 536 107 048 Professional, scientific and technical activities 64 483 39 475 Administrative and support activities 14 807 22 974 Public administration and defence 10 120 34 575 Education 7 576 2 745 Human health and social work activities 18 410 8 127 Arts, entertainment and recreation 6 407 2 854 Other service activities 30 479 5 716 Activities of households as employers 182 712 Activities of extra-territorial organisations and bodies 336 1 Households 812 318 413 899 Activity not stated 1 5 1 Outstanding at the end of year. Source: Danmarks Nationalbank Table 312 Long-term savings schemes with deposit accounts of Danish banks End of year 2014 2015 Percentage change in relation to previous year per cent Specific deposit accounts. total 208 348 210 640 1.1 Index-linked pension savings 5 643 4 737-16.1 Capital-pension accounts 70 069 70 175 0.2 Savings accounts for children 14 213 14 008-1.4 Private pension schemes 1 374 1 293-5.9 Investment-fund accounts 1 1-33.2 Business establishment savings 831 827-0.5 Home-savings contracts 359 297-17.3 Instalment-pension accounts 108 667 111 258 2.4 Savings accounts for education 41 32-22.0 Premium lottery accounts 7 125 7 940 11.4 Market fluctuation adjustment accounts 25 72 190.3 Source: Danish Financial Supervisory Authority www.statbank.dk/mpk43

Table 313 Mortgage banks 2014 2015 Number of institutions 7 7 Profit and loss account +Interest income 93 677 86 939 Interest xpenses 71 418 63 252 Net income from interest 22 259 23 686 +Charges and commissions receivable -2 012-2 275 Net income from charges and commissions 20 247 21 411 Expenditure of the personnel administration and other operating expenses 4 835 4 965 Depreciation and provisions on loans 4 905 4 023 +Adjustment of capital interest -1 120 2 063 +Other ordinary receipts 63 105 Profit/loss on ordinary activities 9 450 14 591 +Extraordinary receipts (net)...... Tax 2 307 3 098 Profit/loss for the year 7 143 11 493 Balance sheets Assets, total 3 718 335 3 647 170 Claims on credit institutions, etc. 782 927 733 881 Loans 2 634 958 2 651 581 Bonds and shares, etc. 240 600 205 751 Holdings in associated and affiliated enterprices 31 709 36 406 Intangible assets 3 037 220 Tangible assets 649 516 Other assets 24 455 18 815 Liabilities, total 3 718 335 3 647 170 Liabilities to credit institutions 698 974 665 453 Issued bonds, etc. 2 739 584 2 719 582 Other liabilities, accruals and deferred income 94 066 67 804 Provisions for liabilities and charges 723 620 Capital deposits 16 505 12 907 Equity capital 168 483 180 804 Source: Danish Financial Supervisory Authority www.statbank.dk/mpk47

Table 314 Major finance companies, factoring and other loans Total activities Status 2014 2015 Ult. 2014 Ult. 2015 Factoring 37 667 26 196 7 416 7 395 Other loans 13 617 15 324 40 078 42 261 Source: Individual finance company www.statbank.dk/mpk57 Table 315 Major finance companies, leasing 2014 2015 Activities in the year Total 17 251 20 439 Industrial equipment 2 918 3 689 Edp and office equipment 1 271 1 035 Lorries and vans 6 240 7 804 Passengercars 4 064 5 532 Vessels, aircraft, railway material 14 20 Buildings 1 142 795 Other 1 602 1 563 Status at end of year 39 324 42 259 Source: Individual finance company www.statbank.dk/mpk31

Table 316 Life assurance companies 2014 2015 Number of companies 19 18 Profit and loss account A: Insurance activities + Premiums net of reinsurance 108 414 115 836 + Allocated investment return transferred from the technical account 166 080 44 923 Receipts from insurance activities 274 494 160 759 Claims incurred, net of reinsurance 105 875 97 313 Change in life assurance provisions 156 588 55 228 Administrative expenses 4 457 4 155 Change in bonus equalization provisions 4 847 1 668 + Result from sickness and accident insurance 374-857 Result from insurance activities 3 101 1 538 B: Investment activities + Result from investment activities 192 238 51 218 Tax on pensions yield 26 159 6 295 Allocated investment return transferred to the technical account 159 695 42 928 Yield on investments carried forward to sickness and accident insurance 4 377 1 023 Result from investment activities 2 007 972 C: Total activities + Result from primary operation 5 108 2 510 + Other ordinary receipts, net 1 030 1 185 + Extraordinary receipts, net 0 0 Taxes 1 700 1 690 Net result for the year 4 438 2 006 D: Increase in equity capital + Net result of the year 4 438 2 006 Dividends, etc. 837 898 Increase in equity capital, total 3 601 1 108 Balance sheets Assets total 2 013 190 2 074 072 A: Investment assets Land and buildings 3 645 3 406 Bonds 515 704 514 934 Shares and other capital holdings 439 242 445 986 Loans 176 819 152 354 Other 15 214 4 888 B: Other assets 862 566 952 504 Liabilities, total 2 013 190 2 074 072 Equity capital 61 121 59 116 Provisions 1 656 191 1 717 696 Other liabilities 295 878 297 260 Source: Danish Financial Supervisory Authority www.statbank.dk/mpk50 and mpk51

Table 317 Accounts of non-life insurance companies 2014 2015 Number of companies 75 71 Profit and loss account A: Insurance activities +Gross premiums written, net of reinsurense 61 932 61 254 +Technical interest 108-31 Receipts from insurance activities 62 040 61 223 Claims incurred, net of reinsurance 43 410 43 880 Administrative expenses 10 936 10 972 Other insurance technical items 505 449 Result from insurance activities 7 189 5 922 B: Investment activities +Result from investment activities 6 786 3 338 C: Total activities Result from primary operation 13 975 9 260 +Other ordinary receipts, net -546-303 +Extraordinary receipts, net 960 583 Taxes 2 174 1 387 Net result for the year 12 215 8 152 D: Increase in equity capital Net result for the year 12.215 8 152 +Balancing items 3 126 2 353 +Capital injection 30 40 Increase, total 15 371 10 545 Dividends, etc. 4 082 1 478 Increase in equity capital, total 11 289 9 067 Balance sheets Assets, total 205 619 202 144 A: Investment assets Land and buildings 5 503 10 210 Bonds 109 830 35 679 Shares and other capital holdings 57 778 43 572 Loans 2 260 84 419 Other 678 0 B: Other assets 29 570 28 264 Liabilities, total 205 619 202 144 Equity, total 80 374 74 634 Provisions 104 153 105 041 Other liabilities 21 092 22 469 Source: Danish Financial Supervisory Authority www.statbank.dk/mpk52 and mpk53

Table 318 Non-life insurance by type Premiums Compensation Total 2014 2015 2014 2015 67 525 67 229 46 906 48 199 Total commercial insurance 17 027 16 481 11 657 12 540 Workmen s compensation 2 994 2 964 1 275 1 479 Buildings 6 161 6 147 4 719 4 451 Contents (other than stock and machinery) 2 912 2 760 1 793 3 312 Professional liability 2 377 2 314 2 104 1 565 Marine and transport 1 174 1 079 874 775 Aviation 0 25-3 -1 Other commercial insurance 1 407 1 192 895 959 Total private insurance 16 378 16 303 11 835 11 610 Householder s comprehensive 5 407 5 425 4 064 3 772 Homeowner s comprehensive 7 166 7 083 5 247 5 315 Weekend cottages 912 910 604 563 Change of ownership insurance 295 317 281 278 Other private insurance 2 598 2 568 1 638 1 682 Total personal accident insurance 12 390 12 653 8 812 10 265 Healt insurance 1 484 1 557 1 139 1 270 Single accident and sickness 10 756 10 970 7 565 8 933 Professional disability 150 126 108 62 Total motor vehicle insurance 19 310 19 146 13 407 12 448 Third-party liability 6 585 6 164 5 374 4 099 Vehicle (own damage) 12 725 12 982 8 033 8 349 Credit and suretyship 402 417 78-239 Touristassistance and Legal aid insurance 1 151 1 292 768 1 046 Total direct business 66 658 66 292 46 557 47 670 Total indirect business 867 937 349 528 Note: Premiums and claims are listed as reserve regulating gross amounts. Indirect business is the reinsurance received, which each insurance company has taken over from other insurance companies. Source: Danish Financial Supervisory Authority www.statbank.dk/mpk54

Table 319 Pension funds Intersectoral pension funds Corporate pension funds 2014 2015 2014 2015 Number of members 757 816 790 780 13 765 13 330 Working members 611 702 637 724 3 293 2 988 Retired members 123 644 130 283 7 832 7 807 Retired spouses 14 595 15 024 1 952 1 926 Children who receive children s pension 7 875 7 749 688 609 DKK mio Current annual pension, total 10 379 15 503...... Pension for members 9 322 13 867...... Pension for spouses 903 1 367...... Pension for children 154 269...... Miscellaneous income Member contributions 20 276 20 735 356 258 Of which extraordinary contributions 1 519 1 675 72 15 Interest income and profits 13 043 12 555 1 693 1 235 Miscellaneous expenditure 1 Pensions 19 297 14 159 1 703 1 663 Retirement allowances 1 450 1 190 72 15 Assets, total 646 091 671 570 59 433 59 821 Central government bonds 1 18 543 13 292 9 916 7 849 Other bonds 1 5 792 5 172 17 622 17 198 Mortgage credit bonds, etc. 1 73 589 65 990 11 687 14 302 Cash at bank and in hand 6 549 6 401 259 303 Mortgage credits 6 3 1 486 2 393 Loans with other collateral 43 195 50 391 0 455 Other assets 498 417 530 321 18 463 17 321 Premium reserves 433 642 438 247 43 040 41 199 Note: The financial year for certain pension funds does not coincide with the calendar year. 1 Book value. Source: Danish Financial Supervisory Authority www.statbank.dk/mpk49

Table 320 Denmark s gold and foreign exchange reserve End of year 2015 2016 DKK billion Danmarks Nationalbanks gold stock 15.5 17.5 Danmarks Nationalbanks foreign assets 405.5 424.9 Claims on the International Valuta Fund 19.6 16.7 Other loans -3.1-3.5 The foreign exchange reserve 437.5 455.6 Source: Danmarks Nationalbank Table 321 Money stock 2015 2016 DKK billion Money stock 1 157.5 1 230.8 Notes and coins outside the banking sector 59.8 61.6 Deposit in banks and savings banks 1 097.7 1 169.2 -Demand deposits 983.8 1 069.8 -Agreement deposits 1 113.9 99.4 1 Includes. e.g. deposits at notice and time deposits. Source: Danmarks Nationalbank Table 322 Consumer credit End of year 2015 2016 Total 18 614 19 023 Balance on credit and account cards 7 862 7 808 Of which, petrol companies 1 408 1 422 Blank credit 6 714 6 800 Secured credit 4 037 4 415 Source: Each individual financing company and credit card company www.statbank.dk/mpk30

Table 323 Danish electronic payment card system 2008 2013 2014 2015 2016 thousands Number of cards 4 010 4 921 5 288 5 788 5 818 Transaction 796 394 1 032 171 1 113 270 1 212 417 1 291 261 Turnover 279 897 318 800 333 581 356 805 376 961 Source: NETS www.statbank.dk/mpk41 Table 324 Exchange rates Currency 2015 2016 Pound sterling GBP 1 028.24 910.57 Bulgarian lev BGN 381.36 380.67 Norwegian krone NOK 83.43 80.18 Polish zloty PLN 178.27 170.68 Swiss franc CHF 698.88 683.13 Swedish krona SEK 79.74 78.63 Czech koruna CZK 27.35 27.54 Hungarian forint HUF 2.41 2.39 EU common currency EUR 745.86 744.52 US dollars USD 672.69 673.27 Australian dollars AUD 505.34 500.87 Brazilian real BRL 204.59 194.51 Canadian dollars CAD 526.42 508.23 Hong Kong dollars HKD 86.77 86.73 Japanese yen JPY 5.56 6.21 Chinese yuan renminbi CNV 107.04 101.29 Singapore dollars SGD 489.13 487.57 Effective rate of DKK 1980 = 100 99.20 100.80 DKK Note: The rate is the annual average. Source: Danmarks Nationalbank www.statbank.dk/dnvala